Generally, the idea for a Medicare Savings Account (MSA) plan is to pay for qualified medical expenses. The money you spend on these expenses will not be taxed, but it will be subject to income tax if you use the money on anything else.
Even though all qualified medical expenses are tax-exempt, not all count toward your deductible, think about this, as you may have to pay more out of pocket before your plan starts to cover expenses, or if you use your MSA for expenses that don’t count towards your deductible.
Here are some expenses that do count towards your deductible:
- Hospital stays
- Doctor’s visits
- Durable medical equipment (DME)
- Home health care
- Skilled nursing care
Note: you must follow your plan’s coverage rules to ensure the expense counts towards your deductible
Here are some expenses that do not count toward your deductible:
- Dental care
- Vision care
- Cost-sharing from Medicare Part D or other drug coverage
You can use the money in your MSA for expenses that are non-medically related, such as rent, groceries, bills, etc., if necessary. Keep in mind that this money will not count towards your deductible and will then be considered taxable income.
To learn more about if an MSA plan is right for you or help to figure out what exactly will be a qualifying medical expense for you, contact the professionals here at Medicare Pathways!